How might technology change the way people are managed?

Technology developments and rapid technological change will affect the workplace of the future. But will it change the way employers approach line management and organisational change? Mark Beatson, Chief Economist at the CIPD, explores the issues and brings out the themes discussed by attendees at the inaugural futureofworkhub event.

At the recent future of work hub event, just about everyone there identified technological change as one of the forces that will shape the future of work. Of course, technological change is a constant of human history like demographic change (projected population changes look radical but they probably don't begin to match the impact of the Black Death!). But, depending on who you listen to, we might be at the start of a period of change as revolutionary, but ultimately enriching, as the Industrial Revolution. According to Erik Brynjolfsson and Andrew McAfee, we are only just beginning to see how computing power can change the economy and our lives. Tyler Cowen in his book Average is Over suggests that the qualities required to do reasonably well in this future – never mind succeed – might require a complete overhaul of how we socialise and educate people. But, this being economics, we can line up Nobel Laureate Edmund Phelps on the other side: In his book "Mass Flourishing", he suggests that the leading Western capitalist economies have lost their 500 year old mojo (not that he expresses it in those terms!).

We also need to remember that, just because new technologies exist, it doesn’t mean they necessarily replace everything that came before. Robots, drones and algorithms may be able to do many of the jobs that people do now but people can sometimes be cheaper or more flexible.

There is evidence already that the extent to which organisations embrace these technologies is a source of competitive advantage. A widely cited study by Brynjolfsson, Hitt and Kim found that companies that emphasised decision-making based on data and business analytics – ‘data-driven decision making’ – had output and productivity 5-6% higher than would otherwise have been expected. Early results from a 2010 survey of some 30,000 US manufacturing plants also suggest that companies who used structured management practices the most enjoyed a performance advantage, and the area where management practice had changed most in the previous five years was in more data collection and analysis.

In the panel discussion, I was thinking aloud about the implications for the way people are managed. What does a ‘data-driven’ organisation look and feel like? Case studies from the technology sector highlight the way ‘the numbers’ become the lingua franca. If employees want to do something, or influence a decision, they are expected to produce analysis in support – and if the data doesn’t exist, they have to find a means of collecting it. And because data is managed as a common resource, not something to be hoarded, any analysis is open to review and challenge, which keeps people decent.

Machine learning means that computers will inevitably pick up patterns in data that humans cannot spot, or for which there is no obvious rationalisation. We are likely to see more and more instances where the analytics suggest one course of action but the wisdom, experience, instinct and gut feeling of those responsible for making decisions point against. Being 'data-driven’ means recognising that analytics might have greater predictive ability than current decision-making tools in some circumstances, so organisations should go with the machine. But what if that involves betting the company on it? I imagine that will be a really big leap for incumbent organisations whereas new entrants may feel they have little to use.

Data-driven decision-making is a challenge to corporate leaders because it downplays the significance of experience, wisdom and instinct – qualities that probably did a lot to get the current crop into the C Suite.

And what about an organisation’s culture? Does being ‘data-driven’ become dehumanising? Interestingly, there are suggestions this needn’t be the case. Adopting data as the lingua franca for decision-making reduces the impact of other factors such as ‘the gift of the gab’ or an individual’s power within the organisation. Some of the heat can be taken out of difficult situations if the discussion centres on the numbers and not about whether X is useless or doesn’t work hard enough. If being ‘data-driven’ means more rational behaviour and less irrational behaviour, doesn’t that also make it more enlightened?

During the panel session, I asked what this might mean for line managers. Most organisations have some hierarchy and the typical line manager role bundles together a number of different tasks: decision-making; co-ordination and supervision of work; coaching and mentoring; and pastoral care. Now not every decision can be left to the data or the wisdom of the crowd, and few organisations even aim to be democracies, so there will still be a need for people to take decisions and be accountable for them. But technology that facilitates collaboration and workflow management creates the means for individual employees and teams to manage themselves (which has the added advantage that employees are usually better at spotting shirkers than managers!).

Employees do need support in learning their job and improving their performance, as well as guidance on their development. But these are precisely the areas where employees are least satisfied with their line managers’ efforts. Our summer 2014 Employee Outlook survey found that the three behaviours employees thought their line managers were least likely to ‘always’ or ‘usually’ display were giving feedback on performance (44%), discussing training and development needs (36%) and coaching (30%). So if line managers are so patchy in doing this, why not allocate the role to specialists who have the necessary skills and are less likely to regard this as something they have to do because it goes with the status, rather than because it’s what they want to do?

Cut things up this way and perhaps there isn’t the need any longer for tiers of management that inevitably include people who were promoted on the basis of their expertise and performance in non-managerial roles and who lack the skills or the aptitude for this new, different bundle of responsibilities. And it’s away with the comfort blanket for both corporate leaders and the HR function – because it’s one less explanation for why their initiatives have come unstuck!

Of course, this might not happen at all. The Harvard Business Review published an article in 1958 predicting that a new phenomenon called information technology would mean that, by the 1980s, many middle management roles would either cease to exist or be downgraded to become technicians (rather than thinkers). Well, many organisations have removed layers of management but without splitting apart the building blocks of the managerial role. And here’s an alternative take which argues that technology can liberate middle managers and gives them the opportunity to transform themselves into ‘middle leaders’ that add more, rather than less, value. What do readers think?